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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
Whether you are an employee, a manager, an entrepreneur or a CEO, The Sustainable MBA Second Edition provides the knowledge and tools to help you ‘green’ your job and organization, to turn sustainability talk into action for the benefit of your bottom line and society as a whole.
Based on more than 150 interviews with experts in business, international organizations, NGOs and universities from around the world, this book brings together all the pieces of the business and sustainability puzzle including:
- What sustainability is, why you should be interested, how to get started, and what a sustainable organization looks like.
- A wide range of tools, guidelines, techniques and concepts that you can use to implement sustainability practices.
- Information on how to be a sustainability champion or intrapraneur in your organization including how to sell these ideas to your team and how to incorporate them into any job.
- A survey of the exciting trends in sustainable business happening around the world.
- A wealth of links to interesting resources for more information.
The Sustainable MBA Second Edition is organized like a business school course, allowing you easy access to the relevant information you need about sustainability as it relates to Accounting, Economics, Entrepreneurship, Ethics, Finance, Marketing, Organizational Behavior and HR, Operations and Strategy.
The Sustainable MBA Second Edition has been updated to reflect global developments in this evolving field to remain the definitive guide to sustainable business. Additional resources to accompany the book are available at www.thesustainablemba.com.
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Veröffentlichungsjahr: 2013
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Contents
Preface
Acknowledgments
PART I: Setting the Scene
Chapter 1: About this Book
Who is The Sustainable MBA for and why should I read it?
What you will find in The Sustainable MBA
How The Sustainable MBA is organized
Ideas on how to use this book
Chapter 2: What is Sustainability?
The basics
Other definitions
Chapter 3: What does this Mean for Business?
The business case
Chapter 4: The Sustainability Journey
The journey
Chapter 5: Getting Started
Step by step
PART II: The Core Topics
Chapter 6: Accounting
Why is it important?
The key concepts
Challenges?
Trends and new ideas
Chapter 7: Economics
Why is it important?
The key concepts
Challenges?
Trends and new ideas
Chapter 8: Entrepreneurship
Why is it important?
The key concepts
Challenges?
Trends and new ideas
Chapter 9: Ethics and Corporate Governance
Why is it important?
The key concepts
Challenges?
Trends and new ideas
Chapter 10: Finance
Why is it important?
The key concepts
Challenges?
Trends and new ideas
Chapter 11: Marketing
Why is it important?
The key concepts
Challenges?
Trends and new ideas
Chapter 12: Operations
Why is it important?
The key concepts
Challenges?
Trends and new ideas
Chapter 13: HR and Organizational Behavior
Why is it important?
The key concepts
Challenges?
Trends and new ideas
Chapter 14: Strategy
Why is it important?
The key concepts
Challenges?
Trends and new ideas
PART III: Tools
Chapter 15: Tools for Monitoring, Managing, and Improving Performance
Assessments
Audits
Environmental and social management systems
Standards
Chapter 16: Tools for Greening Offices and Buildings
Steps for setting up office greening programs
Buildings
Energy
Water
Waste and recycling
Paper
Electronics
All those other little things
Commuting to work
Organizing green events and meetings
Putting together a green team
Part IV: Wrapping It All Up
Chapter 17: What Can I Do?
As an employee – leading by example
As a consumer – putting your money where your mouth is
As a citizen – be active in your community
Chapter 18: What will the Future Bring?
Additional resources: Who, what, where, and how
Index
Praise for first and second editions
Second edition
“The first edition is a spectacular book – its message: green business is good business for any business. The new edition is even better, and includes every component of an MBA program – from accounting to personnel management. Who should read it? Students, those about to start a business, employees, government officials, staff of global organizations concerned with private sector development, and the general public. Ms Weybrecht’s book is a genuine service to our planet.”
Guy Pfeffermann, CEO, Global Business School Network
“We know that the greening of London’s businesses will be essential for our economy in the coming years. The Sustainable MBA will help graduates develop the vision and expertise to lead such change.”
Matthew Pencharz, Senior Advisor Environment & Energy to the Mayor of London
“Giselle Weybrecht provides practical insights for business schools to include sustainability in education and their daily operations. The Sustainable MBA will be a great inspiration for any academic institution . . . as well as business leaders and entrepreneurs. Giselle shows that sustainability is feasible for every type of organization regardless of size and industry.”
Jonas Haertle, Head, UN Principles for Responsible Management Education
“Ms Weybrecht has written a useful book for anyone who cares to do something about tomorrow, today. The Sustainable MBA provides champions with knowledge and tools to affect change and instills hesitant believers with the confidence to act. For business professors, Ms Weybrecht demonstrates how each of us can amplify our own social impact by developing more forward-thinking, responsible citizens and business leaders for our future.”
Dan Le Clair, EVP & COO, AACSB (Association to Advance Collegiate Schools of Business)
“The Sustainable MBA is a comprehensive look at sustainability within all functions of business. It’s a wonderful foundation for any business person trying to grasp the full scope and importance of sustainability.”
Dr Tima Bansai, Executive Director, Network for Business Sustainability
First edition
“. . . The Sustainable MBA presents a timely and important case for comprehensively integrating ESG issues into business training.”
Ernst Ligteringen, Chief Executive, Global Reporting Initiative
“The role of business is to make the world a better place . . . The Sustainable MBA will help us along this road with its abundance of thinking, tools, and resources.”
Kevin Roberts, CEO Worldwide, Saatchi & Saatchi
“Giselle has provided practicing managers with this helpful and thought-provoking green business guide.”
Sir Andrew Likierman, Dean, London Business School
“If people are central to the purpose of a business, then corporate responsibility or sustainability cannot be an add-on . . . Giselle Weybrecht, in her comprehensive book, perhaps first of its kind, has shown how this can actually happen. The book is a must for management students, researchers and practitioners.”
Anant G. Nadkarni, Vice President, Corporate Sustainability, Tata Group
“. . . this book should be read by CEOs, CFOs, CSOs (the new breed of chief sustainability officers) and everyone else in – or aspiring to enter – the C-Suite.”
John Elkington, Co-Founder of Environmental Data Services, SustainAbility and Volans
“An essential read for managers and entrepreneurs alike . . .”
Tom Szaky, CEO, Terracycle
“This groundbreaking book . . . is full of useful tips and advice for those looking to apply sustainability to their job, whatever job or business that may be.”
Liz Maw, Executive Director, Net Impact
“. . . I hope The Sustainable MBA book becomes a prerequisite text for all MBA programmes as sustainability is a key issue that the next generation of managers cannot afford to miss.”
Professor Eric Cornuel, Director General & CEO, EFMD (European Foundation of Management Development)
“. . .This book is a timely resource which will enable and empower many sectors of society to ‘fast forward’ their sustainable journeys.”
Martin Hancock, Chief Operating Officer, Westpac London and Former Chair United Nations Environment Programme Finance Initiative (UNEP FI)
This edition first published 2014
© 2014 John Wiley & Sons, Ltd
First edition published 2010 by John Wiley & Sons, Ltd
Registered office
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Library of Congress Cataloging-in-Publication Data
Weybrecht, Giselle.
The sustainable MBA : a business guide to sustainability / Giselle Weybrecht.— Second Edition.
pages cm
Includes bibliographical references and index.
ISBN 978-1-118-76063-5 (cloth)
1. Management—Environmental aspects. 2. Business enterprises—Environmental aspects. 3. Sustainable development. 4. Social responsibility of business. I. Title.
HD30.255.W49 2014
658.4'083—dc23
2013024208
Cover design: Rogue Four Design
Para mis abuelos
Elena y Antonio Paulino,
por sus vidas llenas de entusiasmo,
alegria y entrega a los demas.
Preface
I’m excited to be writing this preface for the second edition of The Sustainable MBA. The past few years since the book first came out have been a whirlwind, and it has been really encouraging to see how well the book has been received.
Sustainability is such an exciting and constantly evolving field, and is an area that I have been involved in now for many years. I was active at a very young age in sustainable development on a local, national, and international level. Throughout my undergraduate studies and for many years after, I worked within the United Nations system on sustainability issues. In 2002, when attending the World Summit on Sustainable Development in South Africa, I was introduced to a range of projects that the business sector was starting to carry out around this topic and remember thinking how effective it would be if we could combine their expertise, knowledge, reach, and budget with our work. The challenge was that we just didn’t speak the same language. They had PowerPoint presentations and we had flipcharts.
So in 2005, much to the surprise of many of my colleagues who believed that the business sector was responsible for a lot of the problems we were trying to solve – and that the MBA was where these business leaders were being trained to do just that – I left Paris for London to pursue an MBA at the London Business School. I wanted to learn the language and see how to connect these different worlds in order to really move us forward in this field.
When I started the MBA I found that students were interested in sustainability, but didn’t know how to balance that interest with their career plans. Many believed it was a choice they had to make, you either go into business or you go into something more ‘meaningful’ for society, like an NGO or a charity. At the time, and unfortunately to this day, I am surprised at how little these issues are brought up in classes, and when they are they aren’t being brought up in a way that is useful or relevant to the majority of students (although this is slowly changing and there are some champions doing great work in universities around the world). This doesn’t just relate to the MBA, but equally to other disciplines as well as organized company training programs.
This is when I thought, imagine the impact we could have if all the students graduating from business and other programs around the world were not just learning what sustainability is but also how to put it into practice in any job or organization in a way that benefits not just the environment and society but, and perhaps more importantly, the business itself. These graduates – whether they are from business or other disciplines such as law, politics, architecture, etc. – find their way into virtually every type of organization, from business to NGOs to government. Imagine the impact they could have if they were equipped with the skills and knowledge to make sustainability a reality in all of those organizations. We would then, and relatively quickly, start seeing a change in organizations from the bottom up. This is when I started to get interested in the untapped potential of graduates and employees in making sustainability a reality.
During the second year of my MBA I decided to explore further the role sustainability had in business, but more importantly how to equip individuals with the skills to understand and fulfill that role. I looked at the curriculum and found that in order to really reach all students and not just the ones who were interested, the information needed to be embedded and stand alongside the material already being taught. So I started a booklet that could be made available to students and alumni about sustainability. It would be organized according to the different classes taught in the MBA, so that students could easily follow it and use it as part of their courses. The idea was so well received that I started exploring how to scale up the idea. Rosemary at John Wiley & Sons believed in the project and provided the opportunity to turn the booklet into a book. So, post-graduation I set off to interview over 150 CEOs, business leaders, sustainability experts, and academics from around the world to make a resource for readers that was as relevant and useful as possible.
I put my heart and soul into the first edition of the book and was thrilled to see how well it was received. I wanted to create a tool that could be used not just to raise the level of awareness and understanding of sustainability, but also to provide guidance on how to make it part of any business or any job. The book is aimed at a wide audience: entrepreneurs looking to develop a new business idea, employees interested in seeing how this could be part of their job or organization, managers wanting to explore how it could help push their business forward, CEOs and upper management looking to understand what this all means, consumers who want to make more sustainable choices on a daily basis, and individuals who just want to understand what is happening in sustainability and business. There are also hundreds of faculty members who use the book to inspire changes in the way they teach their business classes and even more students who use it as core reading. Businesses around the world are using it to inspire and educate their employees to make sustainability a part of their job.
We – as individuals, as groups – have a lot more power than people think. At the end of the day businesses are made up of people just like us, who make decisions on a daily basis that affect the world we live in. The decision to change a supplier, to give your team members time to explore these issues, can have a huge impact. Our choices as a consumer send messages to companies about what we are and are not willing to buy and support. To make a difference you do not have to quit your job and volunteer with a not for profit. The biggest influence we can have is by changing the businesses and organizations we work for from the inside out. We need to take sustainability out of specialized departments and make it part of everyone’s job.
So here is the second edition. It contains quite a few updates, new resources, and trends as well as some new sections on topics that are becoming increasingly important in the field of sustainability and business. I have also developed a range of additional resources on my website (www.thesustainablemba.com) that may help with your journey.
I hope that this book will inspire and give readers ideas on how they can get further engaged in sustainability, and that it will help to develop a whole new generation of business leaders who speak the language of sustainability and are ready to really move things forward in remarkable new ways.
Acknowledgments
Between the first and second editions I have interviewed over 150 CEOs, business leaders, sustainability experts, authors, NGOs, international organizations, academics, and students from around the world. So many people have been engaged and supportive of this project, too many to list here. I apologize in advance for those names I will inevitably miss. Thank you to the following people for agreeing to be interviewed, for reading through drafts, for sharing your passion for these issues, and for providing various bits of inspiration: Roger Adams at ACCA, Stathis Gould at IFAC, Neil Earnshaw at Enviroman, Chris Tuppen at Fronesys, Rob Gray at CSEAR, Rachel Bird and Ilana Tabu at ICAEW, Michelle Molnar at David Suzuki Foundation, Anthony Pullin at Midcounties Co-operatives and the International Year for Cooperatives, James Gifford from UNPRI, Parvez Ahmed at the University of North Florida, Mark Hoffman at KPMG, Robyn Tomiko Tsukayama at the Harvard Office of Sustainability, Andrew Williams at Eighteen Rabbit, Nancy Furlow at Marymount University, Mary Gentile at Babson, Emily Horgan at CAO, Wim Vanderkerckhove at the University of Greenwich, Vincent Tophoff at IFAC, Phillippa White at TIE, Victoria Brooks, Lisa Calvano at West Chester University, Kofo Adeleke, Leticia Greyling, Rhodes Business School, Samantha Putt del Pino and Eliot Metzger, World Resource Institute, Scott Houston, independent consultant, Claire Thwaits at the Gordon Institute of Business Science, Kevin Roberts, Richard Hytner, Jane Kendall, Roger Kennedy and Fleur Diston at Saatchi and Saatchi, Sean Ansett at At Stake Advisors, Anders Aspling at GRLI, Roger Bancroft at GreenEarth Cleaning, Shima Barakat and Shai Vyakarnam at the University of Cambridge, Leeora Black and Gail Rehbein at ACCSR, Richard Boele at Banarra, Gib Bulloch and Peter Lacy at Accenture, Alice Chapple at Forum for the Future, David Collison at the University of Dundee, Jackson Carroll at McKinsey, Peggy Cunningham at Queen’s University, Kim Custard, Nancy Parker, Jeremy Lardeau and Andrew Smith at PWC, Rebecca Dixon and Susanna Jacobson at Mercer, John Elkington at Volans, Jed Emerson and Lila Preston at GenerationIM, Neil Earnshaw at Enviroman, Stephanos Fotiou, Cornis Lugt, Peter Graham and Sonia Valdivia at UNEPTIE, Katie Fry, Maggie Brenneke and Jodie Thorpe at SustainAbility, Martin Hancock at Westpac, Debra Zupancic, Alan Knight and Daniel Waistell at Accountability, David Logan at Corporate Citizenship, Adam Ognall at UKSIF, Nick Robins at HSBC, Richard Peters at NAB, Simon Pickard at EABIS, Stephanie Robertson at SiPMACT, John Scott at PepsiCo, Graham Sim at GE, Laura Somoggi at Unilever, Mark Wade at Shell, Shauna Sadowski at Clif Bar, Robert Tacon at UNEPFI, John Talberth at Redefining Progress, Katherine Teh-White at Futureye, Karen Wilson and Bert Twaalfhoven at EFER, Kameel Virjee at the World Bank, Anne Wallin at Dow Chemicals, Will Oulton at FTSE, Brad Whitaker at Schlumberger, Justin Golbach at The Aspen Institute, David Roth at WPP, author Bob Willard, members of the AIESEC and OIKOS networks, Jeremy Higgs, Ramanie Kunanayagam, Ila Panik, Svetlana Ignatieva, Peter Arias, Scott McCormick, Sayida Vanenburg, David Murray, Gavin Murray, Henna Jain, Jay Walljasper, Leif Holmberg, Malcolm Fox, Aleksandar Maricic, Ed Perkins, Pete Spark and Adrian Ruiz Carvajal, the London Business School Community including all the students and alumni who took the time to speak to me, in particular John Mullins, Andrew Scott, Andrea Masini, Caitlin Anstee, Michael Blowfield, Dennis Oswald, Rob Goffee, Anne Sandford, Gareth Howells, Mohan Madireddi and John Stopford. Dave Challis, Katherine Madden and the World Business Council for Sustainable Development Future Leaders Team, the incredible global alumni community from Bearhs Environmental Leadership Program at Berkeley (including Bill Sonnenschein), and fellow members of Net Impact around the world.
A big thank you to Rosemary, Nick, and the whole team at John Wiley & Sons for making this possible . . . again, and to all the businesses and business schools who have used the book with their employees and students.
An especially big thank you to Alison Clayson, Bryan Mundell, Ariel Speicher, Al Martine, Andrew Likierman, Michael Kelly and Connie Giordano who helped immensely in making the first edition a reality. Thank you to Paul Woolfenden for his inspirational chats and fantastic illustrations.
A little thank you to the dolphins at the Curacao Dolphin Academy, the guide dog puppies in Cambridgeshire, the kangaroos in Oz, and my mountain bike in Texas who all provided hours of inspiration and constructive distraction time for both the first and second editions.
Thank you to Howard and Joyce Mills. The biggest thank you goes to my family, to my parents Earl and Elena Weybrecht, my brother Michael, and my aunt Carmen for their patience, love and continued support.
Thank you to my wonderful Luca for not joining us until right after I handed in the second edition. Last but not least, without you Rich I wouldn’t have been able to do any of it.
This book is dedicated to my grandparents (the dedication is written in Spanish): To my grandparents Elena and Antonio Paulino, for their lives full of enthusiasm, joy and generosity to others.
PART 1
SETTING THE SCENE
Chapter 1
About this Book
‘Your Chinese clock radio sounds, waking you up with news from the BBC, and you slip out of your Egyptian cotton sheets and into the shower. You dry off and put on underwear from El Salvador, jeans from Lesotho, and your favourite blue shirt from Sri Lanka. A cup of Tanzanian coffee, some Brazilian orange juice, and you’re off to work in your Japanese car – assembled in Kentucky, powered by gasoline from Saudi Arabia, Nigeria, and Russia. Good morning!’
WorldChanging
The world we live in today is ever shrinking, and although increased communication and globalization play their part, they are not the only reasons. There is a growing realization that everything and everyone has become very interdependent. With more than 7 billion people living on the planet, regardless of who you are, where you live, or what you do, you are impacted by and have an impact on the health of the planet, society, and the world economy. The decisions we make as employees, as consumers, and as citizens on a daily basis impact both business and the wider society.
Consider this: People are wondering what is happening to the bees. Bees play a crucial role in the supply of the world’s food as they are essential for the pollination of one-third of the world’s crops, valued at US$215 billion annually worldwide. Unfortunately, no one knows exactly why bee colonies are disappearing, and few people seem particularly bothered by it . . . yet. Since we are so dependent on these little creatures for the food we eat, perhaps we should be more concerned about the worldwide loss of these bee colonies. While there appears to be no single definitive cause for this potential disaster, intervention by man and industry through the use of pesticides and stress to colonies are considered to be factors. One of the results of this decline is that businesses themselves who used to benefit from free pollination now have to pay to bring pollinators to their crops.
The world’s challenges are also business challenges. Not only do environmental, economic, and social issues impact the ability of a business to operate now and in the future, they also impact their employees, the communities in which they operate, their customers, the sources of their materials.
For this reason, managers and employees at all levels and in all types of organizations are placing greater emphasis on sustainability, and are increasingly interested in bringing sustainability culture and tools into their daily operations. Although many start because of a desire to make a positive impact on the world, they are finding that the results can be significant in terms of real business benefits, such as reduced costs and liabilities, greater service quality, higher customer satisfaction, and improved corporate image.
Nevertheless, many managers face considerable uncertainty over what they can, or should, be doing to enhance their environmental and social practices and sustainability goals. They often believe that applying new tools to address these challenges may be good for society, but not necessarily for the business itself. A lack of understanding of the potential benefits, fear of moving in new directions, confusion over the range of tools available to address sustainability issues, overwhelming and often-contradictory amounts of information are among the reasons why many are slow to act.
This book aims to give employees and individuals the knowledge and tools to be able to apply sustainability practices to their business in a way that is both profitable to the business and to society as a whole. The book does not appoint blame for the challenges we face, but instead focuses on how businesses and employees can take action to be part of the solution.
Imagine what you could do as a company if you had 7 billion employees all pulling in the right direction.
Who is The Sustainable MBA for and why should I read it?
This book is aimed at managers, both experienced and new, current and future, who are interested or curious to know more about the field of business and sustainability and how they can apply these ideas to their jobs, regardless of what they do or where in the world they do it. Because it provides an introduction to and overview of these issues, it will be of interest if you fall into one, and probably more than one, of the following groups:
I am in a
management position
and need to better understand what sustainability is but don’t have the time to spend hours researching. I understand that I can make an impact through my work and my decisions, but am not sure how to.
I am an
entrepreneur
and am interested in starting my own business and want to incorporate some sort of sustainability elements into it, either as part of my core offering or as part of the way I do business. I understand that sustainability provides a range of exciting new opportunities that I want to understand and explore.
I am a
CEO
or board member and want to learn more about how I can move my business to be more sustainable. I understand that this is becoming the new business reality and that business success and sustainability are linked. I understand that in order to really move forward in this area, CEO leadership is required.
I run or work for a
small business
and am overwhelmed by the amount of information out there on sustainability. I want to do something but am not sure what to do and where to start. I understand that I can tap into sustainability opportunities even with my limited budget and time and that these tools can help strengthen my overall business.
I am an
employee
where my day-to-day job doesn’t currently have anything to do with sustainability, but I think it could, and I want to know how I can incorporate it into my job. Regardless, I understand that sustainability tools and strategies will increasingly become part of everyone’s day-to-day job and I want to understand what it is all about.
I work in
sustainability
but mostly spend my time in one area and am not as familiar with everything else happening in this vast and growing field. My job rarely involves stepping back and thinking about the big picture.
I am a
teacher
or a
trainer
and want to incorporate sustainability messages into my teaching lessons. I understand that if the new generation of employees and managers are aware of these issues, this could have a huge impact.
I am a
student
and want to know more about this issue. I hope someday to be working for a company that takes sustainability seriously. I am passionate about these issues and want to make sure I direct that passion into an area where I can really make an impact.
I am a
consumer
and want to make the right choices on a day-to-day basis. I understand that the products I buy help to support either good business practices or bad ones. I find it difficult to sort through quickly and easily and would like some help.
I
just want to know more about sustainability, but am overwhelmed by all the information out there and not sure where to begin.
Regardless of whether or not you have the word ‘sustainability’ in your job description, it is increasingly important that you understand what sustainability means, both as a concept, and as a set of decisions and actions that impact your organization. Few jobs require or even provide the chance to step back and think about the big picture. So, regardless of your job function or the industry you work in, you will find that this book has some information directly relevant to you, while also introducing you to some of the tools that other industries are exploring.
What you will find in The Sustainable MBA
The Sustainable MBA equips individual employees with the tools to be able to take sustainability from talk to action; to understand what is happening in this area, sell these ideas to others on their team, and implement them. For this reason the book provides a vast amount of information and resources on the topic, including:
An overview of sustainability tools.
The book provides an overview of the work being done in sustainability. While sustainability is an interdisciplinary subject, the typical MBA, the typical business and employee expertise and training is still, for the most part, divided by functional areas. This is why the book is organized to follow the typical MBA.
Business case.
For every tool and idea introduced, the business case is presented to help you understand the advantages it could bring and to present a case to sell it to your team or managers.
‘How to’s and guides to implementation.
The book does more than simply outline the tools and ideas involved in sustainability, it also provides information on how to implement them, with links to resources for more information and help.
Challenges.
The book outlines the challenges involved in pursuing different sustainability strategies in order to give managers a ‘heads up’ on what to expect. At the same time, the challenges presented act as a call to the next generation of corporate leaders to build their careers around tackling these problems.
Knowledge from experts around the world.
The book draws on a vast amount of information and research that has been undertaken in this area by groups internationally as well as over 150 interviews with students, professors, experts, thought leaders, businesses, CEOs, entrepreneurs, NGOs, and international organizations working and interested in this area.
Tips for sustainability champions.
Whether you are looking to be a sustainability champion at work or as a consumer, the book is filled with tips for individuals and teams who are looking to explore some of these tools, including handy lists and lessons learned. They build the case that sustainability and business profit and success are inextricably linked together, rather than diametrically opposed to one another.
Many additional resources.
Because the field of sustainability is a complex and changing field, the book contains many links to organizations and websites where you can find up-to-date information, statistics, best practice, and information. The focus is on international websites because they change less frequently, and because they often link to other national or local initiatives happening in countries around the world.
Trends and new ideas.
Last but not least, the book presents many exciting trends happening around the world in sustainability – things you want to keep an eye out for.
How The Sustainable MBA is organized
The Introduction sets the scene with the basics on what sustainability is, what this means for business, what the sustainability journey looks like, and how to get started. It also provides tips on how to recognize leading companies, how to sell sustainability to your team, and how to get past excuses.
The Core Topics present information on sustainability as it relates to the main topics introduced in a typical MBA program and the core functional areas of a business: Accounting, Economics, Ethics, Entrepreneurship, Finance, Marketing, Operations, Organizational Behavior, and Strategy.
The Tools provide information on how to conduct audits and assessments, as well as a guide on how to green the office and buildings you work in. Other tools are spread out through the book, and all present guidelines, techniques, and concepts that a business can use to incorporate sustainability into their operations.
The Wrapping It All Up section provides ideas on how you as an individual can make a difference – as an employee, a consumer, and a citizen – and how your actions in each of these spheres has an impact on sustainable business. The section also provides a look at what the future may bring as well as some tips for moving forward.
Finally, the Who, What, Where, How section provides some additional resources for individuals looking to learn more about who has a role to play in sustainability, how different industries are involved, and links to organizations working in sustainability business in different regions around the world.
Ideas on how to use this book
There are many different ways an individual or a business can use this book to explore sustainable business options.
Take this book and read it from cover to cover or dip in and out to learn more about the issues that interest you.
Provide copies to members of your team to raise the general awareness in your office on these issues.
Start a brainstorming session around the areas that your business could explore.
Use it as a reference guide when you are interested in finding out more.
Organize a short or long course around this information.
Use it as a way to learn more about what business is doing to make smarter choices as a consumer.
Chapter 2
What is Sustainability?
‘You can resist an invading army; you cannot resist an idea whose time has come.’
Victor Hugo
The basics
In 1983, the World Commission on Environment and Development (also referred to as the Brundtland Commission, named after its chair Gro Harlem Brundtland) was convened by the United Nations to address growing concern ‘about the accelerating deterioration of the human environment and natural resources and the consequences of that deterioration for economic and social development.’ In 1987, the Commission’s report (known as the Brundtland Report or Our Common Future) alerted the world to the urgency of making progress toward economic development that could be sustained without depleting natural resources or harming the environment. The report provides the world with the most widely quoted definition of sustainable development:
‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains within it two key concepts:
the concept of needs, in particular the essential needs of the world’s poor, to which overriding priority should be given;
and the idea of limitations imposed by the state of technology and social organization on the environment’s ability to meet present and future needs.’
As the International Institute for Sustainable Development puts it, ‘Sustainable development focuses on improving the quality of life for all of the Earth’s citizens without increasing the use of natural resources beyond the capacity of the environment to supply them indefinitely. It requires an understanding that inaction has consequences and that we must find innovative ways to change institutional structures and influence individual behavior. It is about taking action, changing policy and practice at all levels, from the individual to the international.’ They provided a variation of the Brundtland definition aimed at business:
‘For the business enterprise, sustainable development means adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today while protecting, sustaining and enhancing the human and natural resources that will be needed in the future.’
The idea of sustainable development is nothing new. Societies over time have had to learn to balance social, environmental, and economic concerns in order to prosper and continue for generations. At its core, sustainable development is about creating the appropriate balance and interaction between:
Social equity,
which refers to issues such as human rights, peace, security, justice, gender equality, and cultural diversity, among others (also referred to as People).
Environmental protection,
which refers to the natural environment including water, energy, agriculture, biodiversity, fish, forests, and air (also referred to as Planet).
Economic development,
which refers to an understanding of the limits and potential of economic growth and includes issues such as poverty reduction, responsible consumption, corporate responsibility, energy efficiency and conservation, waste management, employment, and education (also referred to as Profit).
Two other elements tie social, environmental, and economic issues together. These are:
Governance,
which acts as an overarching principle that provides the context for sustainable development to occur by promoting structures at the local, national, and international levels that are transparent and effective.
Culture,
including our shared attitudes, values, goals, and practices, provides the framework for sustainability as it guides and shapes our day-to-day behavior.
All three issues are intertwined and affect each other. As outdoor gear and apparel retailer REI’s CSR Manager put it, ‘We don’t distinguish between environmental and social challenges around sustainability for business. In fact, all these issues intermingle. Eventually, someplace along the way, there’s really no such thing as an environmental problem that doesn’t have social consequences, and there’s really no such thing as a social problem that doesn’t really fold into or have dimensions that are environmental.’1 Sustainability, therefore, involves seeing the world as a system and looks at how things interact within that system.
Other definitions
Many models have been developed around the world by business, NGOs, and international organizations to provide other ways of understanding sustainability, based on the balancing of social, environmental, and economic factors.
The Five Capital Model looks at different kinds of capital from which we derive the goods and services we need to improve the quality of our lives:
Natural capital
is any stock or flow of energy and material that produces goods and services.
Human capital
consists of people’s health, knowledge, skills, and motivation.
Social capital
concerns the institutions that help us maintain and develop human capital in partnership with others; e.g., families, communities, businesses, trade unions, schools, and voluntary organizations.
Manufactured capital
comprises material goods or fixed assets which contribute to the production process rather than being the output itself; e.g., tools, machines, and buildings.
Financial capital
plays an important role in our economy, enabling the other types of capital to be owned and traded. However, unlike the other types, it has no real value itself but is representative of natural, human, social, or manufactured capital; e.g., shares, bonds, or banknotes.
The Natural Step framework derives from systems thinking; recognizing that what happens in one part of a system affects every other part. It takes an upstream approach to sustainability and addresses problems at the source. The framework begins by understanding the broader system within which problems occur and developing effective, durable solutions to the environmental and social issues of the new century. According to the Natural Step, ‘Creating a sustainable world means creating new ways for people to live and thrive – while keeping the planet’s ecosystems and the global social tissue healthy and able to sustain us and future generations’ (www.naturalstep.org).
The Earth Charter (2000), initiated by Maurice Strong (Chairman of the Rio Summit) and Mikhail Gorbachev, was the result of a call from the World Commission on Environment and Development for a ‘universal declaration’ to guide the transition to sustainable development. It is the product of a decade-long, worldwide, cross-cultural conversation about common goals and shared values. It looks at respecting and caring for the Earth’s community through ecological integrity, social and economic justice, democracy, non-violence, and peace, among other things (www.earthcharter.org).
The Ecological Footprint is a resource management tool that measures how much land and water area a human population requires to produce the resources it consumes and to absorb its wastes using prevailing technology. It can be used by a country, a region, a city, a business, or an individual. It now takes more than one year and six months for the Earth to regenerate what is used in a single year. As long as our governments and business leaders do not know how much of nature’s capacity is being used or how resource use compares to existing stocks, overshoot may go undetected – increasing the ecological deficit and reducing nature’s capacity to meet society’s needs (www.footprintnetwork.org).
Underlying many of these models for defining sustainability are several principles that guide accountability and responsibility:
The
precautionary principle
states that ‘In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost effective measures to prevent environmental damage’ (
www.pprinciple.net
).
The
proximity principle
says that the treatment and disposal of waste should take place as near as possible to the point of production as is technically and environmentally possible.
The
polluter-pays principle
says that the cost of pollution should be covered by those who cause it. It is generally recognized as a principle of International Environmental Law and a fundamental part of the environmental policy of both the OECD and the EC (
www.eoearth.org/article/Polluter_pays_principle
).
The number of terms used to better understand and communicate what sustainability means to business and society and how to take action seems to grow by the day. The ‘sustainability glossary’ includes concepts such as corporate social responsibility, corporate citizenship, tools such as eco-design, and anything starting with the word ‘green.’ The choice of terms is usually made by the individual, the company, or the country, based on the strategy they are implementing, the issues that are most important to them, the tools they decide to use, or simply on what they believe speaks most to their people. Although the myriad of terms represent a variety of concepts, principles, distinct tools, and ways of understanding the issues, they all come together in a field that in this book we call ‘Sustainability.’
Endnote
1.www.greenbiz.com/podcast/2008/04/14/business-engine-creating-environmental-stewards.
Chapter 3
What does this Mean for Business?
‘We are launching Ecomagination not because it is trendy or moral, but because it will accelerate our growth and make us more competitive.’
General Electric CEO Jeff Immelt2
The business case
You are certainly not alone if you are wondering, ‘What does this have to do with my business?’ However, the answer is simple – everything. In 1970, Milton Freidman said ‘There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.’ Over 40 years on, it is the way companies create those profits and the rules of the game that have changed, as we realize both the necessity of adopting sustainability into everyday business practices, as well as the business opportunities this brings. Today, employees in organizations of all sizes and in all sectors are applying sustainability strategies to their work and are increasingly outspoken about the benefits. Those who are successful are building a business case for sustainability that suits the unique needs of their project, their initiative, their division, or even their whole company. While the details of the sustainability strategy adopted by each business will vary, here are some compelling reasons why businesses are incorporating sustainability concepts into their day-to-day operations:
1. Reduce costs. All companies have an interest in keeping costs in check. Sustainability provides a mechanism to reduce costs by focusing on using less resources (e.g., raw materials, energy, hazardous materials, people, and water), making processes more efficient, and minimizing or eliminating waste. Often these kinds of changes are referred to as ‘low-hanging fruit’ or ‘easy wins’ because, at least initially, small changes can have a big impact. However, larger structural changes that can be more complicated and take a longer time to implement can also have the greatest impact in the long run. Procter & Gamble’s program to ‘Design manufacturing waste out,’ for example, has saved the company over US$500 million and eliminated 2 million tonnes of waste.
2. Preserve resources. A key element of sustainable business practices is the preservation of the resource base. Companies are realizing that the raw materials they depend on to produce their products are being threatened. For example, Brazil-based Natura has a program to sustainably use locally available raw materials that form the basis of their range of cosmetic products. Natura works closely with certifiers to guarantee the proper sourcing of its resources and to promote conservation through compliance with environmental and social guidelines.
3. Comply with legislation. There are an increasing number of control mechanisms, regulations, and standards being put in place that companies must follow. These cover a wide range of areas, including discharge of pollution, worker safety, product content, technical performance, labeling, requirements for reusing and recycling, and ecosystem protection. Some of these, such as the Global Reporting Initiative, are currently voluntary but will increasingly be considered industry standards. Others are mandatory, such as the European WEEE initiative or ‘take back’ laws, which require manufactures to take back all vehicles and electronics equipment sold in a particular country and recycle or dispose of them safely after use. It is likely that regulations and ‘voluntary’ standards will increase, both in number and stringency. In addition, the costs or consequences of not conforming, or leaving it to the last minute to conform, need to be considered in a business case.
4. Enhance reputation. As Warren Buffett puts it, ‘it takes twenty years to build a reputation and five minutes to ruin it.’ Today, those five minutes may feel more like 30 seconds. Petrobras, Brazil’s national energy company, stunned by a series of catastrophic oil spills and other accidents around the turn of the century, realized it would have to fundamentally change to protect its business and reputation. The company launched the biggest environmental and operational safety program in Brazil’s history, overhauled its operations, and pushed cultural change from the top down. Environmental and social performance is now central to the firm’s strategy and Petrobras is recognized as a global leader in the oil and gas sector, led actively by its CEO.3
5. Differentiate. Being seen as sustainable can help differentiate your business. This can increase income by securing the loyalty of current customers and attract new ones, resulting in increased market share. Businesses can grow revenue from new markets for sustainable products and services, and they can also grow market share through better-quality products that benefit the customer. One example of this is MAS, a Sri Lankan apparel manufacturer with customers including Victoria’s Secret, Gap, Marks & Spencer, and Nike. In a market replete with low-cost rivals, MAS differentiated itself based on its exemplary employment practices (called ‘Women Go Beyond’), its green plant, and organic and fair trade products. This persuaded several western firms to choose it as a strategic partner.
6. Attract quality employees. The former CEO of IKEA, Anders Dahlvig, said that the pressure to be ‘green’ is ‘now coming from underneath, from our co-workers themselves who expect us as a company to do more, faster.’ Employees are more likely to feel proud of working for employers who take their responsibilities to society seriously. More businesses are realizing this, and are prioritizing these issues in order to maximize their capacity to attract and retain skilled and talented employees, which in turn increases their ability to innovate and compete.
7. Satisfy customer needs. Public expectations of what is possible are ever increasing. The eco-conscious consumer is a growing population who expects the brands they buy to meet their green standards while also meeting their product needs. Many organizations are getting involved in sustainability because their customers, clients, or business partners are asking them to. People are increasingly looking to do business with companies that share their level of commitment.
8. Meet stakeholder expectations. In 2005 the then CEO of Wal-Mart, Lee Scott, recognized that the time when CEOs could sit in their towers and make decisions without consulting stakeholders was over. ‘We thought we could sit in Bentonville, take care of customers, take care of associates – and the world would leave us alone. It doesn’t work that way any more.’4 Companies need to earn their ‘license to operate.’ They kicked off an environmental initiative to improve their environmental stewardship reputation and increase their bottom line. Conversely, constant failure to address the concerns and expectations of these groups will reduce investor confidence in the firm’s stock, impacting the cost of financing and thus profit-making opportunities.
9. Attract capital investment. Just as consumers are becoming more aware of the importance of sustainability issues, so are investors and shareholders. There is growth in socially responsible investment and ethically screened funds, embedding ESG issues into investment analysis, as well as a growth in industry standards such as the Dow Jones Index, FTSE4Good, London principles for financial institutions, and Equator principles for project finance. As environmental and social criteria are becoming a standard part of lending risk assessments, sustainable businesses are more likely to be able to attract capital from banks and investors.
10. Capitalize on new opportunities. Mexican cement company Cemex considered ways to create a whole new business around improving the living standards of the 20 million people with inadequate shelter in Mexico. As a result, they now provide housing for poor people at a profit through a special program that enables low earners to pay weekly installments of US$11.50 for 70 weeks to gradually buy the building materials they need to build a home. The program, called Patrimonio Hoy, provides quality products on low-cost credit at fixed prices, as well as technical building advice. So far 83 million US dollars have been granted, with an on-time payment rate of more than 99%. The program has expanded to over 100 centers across Mexico and South America.
11. Increase transparency.
